Key Facts to Know About Medicaid Expansion Proposal

The question of whether to expand Medicaid and extend health insurance to thousands of Oklahomans promises to be a major topic over the next year.

The Healthcare Working Group, a bipartisan legislative committee charged with deciding whether to endorse Medicaid expansion or other policy moves, kicked off its work last week and is expected to unveil recommendations before next year’s session. Meanwhile, a signature-collecting drive is underway to put a state question on a 2020 ballot to accept expansion.

The stakes are significant: Rural hospitals, the state budget and the health and lives of thousands could be affected. Whether the battle is fought in the Capitol or at the polling place, both supporters and opponents will be outspoken on why the expansion is needed or why it could harm the state for years to come.

Here are some key facts to know about Medicaid expansion as the debate heats up.

Who would be eligible for Medicaid under expansion?

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Oklahoma’s Medicaid program, known as SoonerCare, is open now to low-income residents who are children, parents with children under 19, pregnant women or blind, disabled or elderly. The latest report from the Oklahoma Health Care Authority shows that about 20 percent of the state’s population is enrolled, including 263,800 adults and 526,600 children.

The eligibility rules were generally standard across the
nation until the Affordable Care Act was passed in 2010 and a U.S. Supreme
Court decision two years later decided that
states could decide whether to accept federal funds to expand Medicaid.

State that accept expansion can now cover adults under 65 who
make up to 138 percent of the federal poverty level, or up to an annual salary
of $17,236 for an individual or $35,534 for a family of four.

A 2013
Leavitt Partners study commissioned by the state projected that an
additional 628,000 adults would be eligible for Medicaid if the state accepted
expansion. But the number of newly eligible residents who would actually enroll
range from 187,000 to almost 275,000 Oklahomans, according to the study.

A more recent
analysis from the Oklahoma Hospital Association projected that 550,000
Oklahomans would be newly eligible for Medicaid and 275,000, including 215,000
uninsured residents, would gain coverage under expansion.

Where is the expansion population?

The U.S. Census Bureau reports
that in 2017, Oklahoma had the second highest uninsured rate in the country, at
14.2%. Only Texas was higher. That number has declined from 17.7% in 2013.

The data, however, are more striking when looking just at those eligible under Medicaid expansion.

Almost 26.4% of low-income Oklahomans under 65 who make up to 138% of the poverty level lack insurance, according to the Census Bureau. In rural Oklahoma, particularly in the Panhandle and northwest corner of the state, the number is higher, with uninsured rates at or over one-third of the population in several counties.

Which states have expanded Medicaid?

As of Aug. 1, Oklahoma was one of 14 that had not accepted expansion, according to a count from the Kaiser Family Foundation.

Most of the non-expansion states are located in the southeast or Great Plains and are led by Republicans. Of the states bordering Oklahoma, only Arkansas, New Mexico and Colorado have accepted expansion.

But voters in non-expansion states have increasingly tried
to pass the proposal by popular vote. Last year, Medicaid expansion made the
ballot in Idaho, Montana, Nebraska and Utah. It failed only in Montana.

Who pays for the expansion?

States and the federal government split the cost to cover
the traditional Medicaid population. Some states, including Oklahoma, receive
more than others, based on a calculation using the Federal Medical Assistance
Percentage (FMAP), a rate that compares a state’s per capita income to the
national per capita income.

Oklahoma’s FMAP last year was about 58%, meaning the federal government contributed $1.43 for every $1 the state spent. The state spent about $1.3 billion and the federal government spent about $3 billion in Oklahoma Medicaid costs in 2018.

The funding split for a state’s expansion population operates
differently.

For two years after the health-care law took effect in 2014,
the federal government covered all the costs for the newly eligible population
in state that accepted expansion. That rate has been phased down so the federal
government will cover 90% of the expenses in 2020 and all subsequent years.

The 2013 Leavitt report estimated that the state’s share of
the costs would range from $137 million to $158 million if Oklahoma Medicaid
expansion took effect in 2021. But the report anticipates a net cost of $49 million
to $81 million when anticipated savings in existing programs across state
government are also considered.

How would Oklahoma pay for the plan?

The ballot language on State Question 802 is silent on where
the funding would come from. It would be up to the Legislature to use savings,
find new revenues or make cuts to pay for the state’s share of the costs.

The Commonwealth Fund, a nonprofit that tracks health care issues, reports that nine states that have accepted the expansion have earmarked a tax increase to pay for the expansion while others cut other Medicaid costs, asked hospitals to help pay for it or have used general funds.

Correction: A previous version of this story incorrectly stated that Oklahoma is one of 14 states that has accepted Medicaid expansion. Oklahoma is one of 14 states that has not accepted expansion.

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